Market Matters Blog 02/16 11:08
DDG Prices Remain Firm on Average
Positive Train Control May Not Be Fully Operational by Dec. 31 Deadline
DDG Prices Steady to Weaker
S.O.S: Locks and Dams on U.S. Rivers Falling Apart
DDG Prices Continue to Rise
Electronic Logging Device Fight Not Over; More Exemptions Sought
Icing Continues to Besiege U.S. River System
DDG Prices Remain Strong
DDG Prices Climb Higher
Extreme Cold Causes US Rivers to Ice Over
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DDG Prices Remain Firm on Average
OMAHA (DTN) -- The average distillers dried grain (DDG) spot price from the
39 locations where DTN collected bids was $148 for the week ended Feb. 15, $1
stronger on average than a week ago.
Based on the average of bids collected by DTN, the value of DDG relative to
corn for the week ended Feb. 15 was at 112.68%, and the value of DDG relative
to soybean meal was at 39.60%. The cost per unit of protein for DDG was $5.48,
compared to the cost per unit of protein for soybean meal at $7.87. The surge
in soymeal prices the past week has kept DDG as a good value in rations.
Domestic prices were mixed, but a few states where supplies are tight saw an
increase in values. The Energy Information Administration (EIA) report
Wednesday showed that ethanol production for the week ending Feb. 9 was the
lowest production number since the start of the year, adding to the tight
supply of DDG for some plants. Merchandisers noted that prices at the Texas
border remain strong, indicating continued demand form Mexico.
The U.S. Grains Council (USGC) said in its weekly price update that barge
CIF NOLA prices are $8/metric ton (MT) higher this week while FOB Gulf DDGs
values are up $9/MT. "Merchandisers are reporting Asian buyers are showing only
light interest at current prices, waiting for prices to moderate somewhat.
However, prices for 40-foot containers to Southeast Asia increased $6/MT this
week with prices to Shanghai leading the way (up $9/MT). On average, DDGS
destined for Southeast Asia increased $4/MT this week."
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
CURRENT CURRENT CHANGE
COMPANY STATE 2/14/2018 2/8/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $170 $170 $0
Modified $85 $85 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $150 $150 $0
Indiana Dry $150 $150 $0
Iowa Dry $140 $145 -$5
Michigan Dry $160 $160 $0
Minnesota Dry $135 $135 $0
North Dakota Dry $148 $148 $0
New York Dry $165 $165 $0
South Dakota Dry $145 $145 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $155 $155 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $165 $160 $5
Iowa Dry $138 $138 $0
Michigan Dry $170 $165 $5
Minnesota Dry $138 $138 $0
Missouri Dry $160 $160 $0
Ohio Dry $165 $160 $5
South Dakota Dry $140 $140 $0
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $150 $0
Wet $50 $50 $0
Illinois Dry $155 $155 $0
Nebraska Dry $150 $150 $0
Wet $50 $50 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $150 $145 $5
Indiana Dry $145 $145 $0
Iowa Dry $140 $140 $0
Michigan Dry $150 $140 $10
Minnesota Dry $135 $135 $0
Nebraska Dry $145 $150 -$5
New York Dry $165 $165 $0
North Dakota Dry $150 $150 $0
Ohio Dry $150 $150 $0
South Dakota Dry $140 $140 $0
Wisconsin Dry $140 $140 $0
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
Indiana Dry $145 $145 $0
Iowa Dry $135 $135 $0
Minnesota Dry $135 $135 $0
Nebraska Dry $150 $150 $0
Ohio Dry $145 $145 $0
South Dakota Dry $138 $128 $10
California $207 $197 $10
Western Milling, Goshen, California (559-302-1074)
California Dry $210 $210 $0
*Prices listed per ton.
Weekly Average $148 $147 $1
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 2/15/2018 $3.6775 $131.34
Soybean Meal 2/15/2018 $373.70
DDG Weekly Average Spot Price $148.00
DDG Value Relative to: 2/15 2/8
Corn 112.68% 112.53%
Soybean Meal 39.60% 43.02%
Cost Per Unit of Protein:
DDG $5.48 $5.44
Soybean Meal $7.87 $7.19
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
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Positive Train Control May Not Be Fully Operational by Dec. 31 Deadline
The nation's railroads have a little over 10 months left to implement new
positive train control systems meant to improve safety and security. While some
railroads report that they expect to meet the Dec. 31 deadline to implement the
new systems, others say they have made little progress.
The U.S. Department of Transportation (DOT) released a letter on Jan. 2,
2018, from Secretary Elaine L. Chao to the entire nation's Class I railroads,
intercity passenger railroads and state and local transit authorities stressing
the urgency and importance of safely implementing positive train control (PTC)
systems in the upcoming year to meet the Dec. 31, 2018, deadline, as mandated
by Congress.
"Advancing the implementation of Positive Train Control is among th` most
important rail safety initiatives on the Department's agenda," said Secretary
Chao. "The FRA leadership has been directed to work with your organization's
leadership to help create an increased level of urgency to underscore the
imperative of meeting existing expectations for rolling out this critical
rail-safety technology."
Here is a link to a copy of her letter and more background on PTC:
https://www.transportation.gov/briefing-room/ptc-letters-secretary-chao
The Rail Safety Improvement Act of 2008 originally mandated that PTC systems
be implemented across a significant portion of the nation's rail industry by
Dec. 31, 2015. PTC is an integrated command, control, communications and
information systems for controlling train movements with safety, security,
precision and efficiency.
However, following warnings by several railroad companies that they would
not be able to meet that deadline, the House Transportation and Infrastructure
Committee on Sept. 30, 2015, introduced bipartisan legislation to extend the
Dec. 31, 2015, deadline for all railroads operating in the United States to be
compliant with PTC technology.
On Oct. 27 and 28, 2015, Congress passed the bipartisan Surface
Transportation Extension Act of 2015 (P.L. 114-73). Section 1302 was the
Positive Train Control Enforcement and Implementation Act of 2015, which
extended the deadline to Dec. 31, 2018, with the option of up to 24 months of
"additional time." Additional time is subject to Federal Railroad
Administration (FRA) review and approval if railroads meet certain
implementation milestones.
In a Feb. 8, 2018, article, the Omaha World-Herald said officials for the
trade associations representing the seven major freight railroads in the U.S.
and the nation's commuter railroads now say they view Dec. 31 "as the date by
which railroads must meet several PTC milestones to qualify for an extension,
rather than the ultimate deadline."
"The Transportation Department has little choice but to grant the extensions
as long as railroads meet the milestones," Kathryn Kirmayer, the Association of
American Railroads' general counsel, told the World-Herald. "One milestone is
that freight railroads have PTC in operation on half their route miles where
it's required."
Members of Congress expressed frustration with railroads backing off this
year's deadline, the World-Herald reported. Congress never intended the
extensions be used "to allow railroads that have dragged their feet to just
blow off the mandate," said Rep. Peter DeFazio of Oregon, the House
Transportation Committee's senior Democrat, according to the World-Herald. Sen.
Bill Nelson of Florida, the Senate Commerce Committee's senior Democrat, said,
"Every railroad should be taking the recent deadly train accidents seriously
and doing everything they can to meet the 2018 deadline."
The Subcommittee on Railroads, Pipelines, and Hazardous Materials announced
on their website that they will meet on Thursday, Feb. 15, to receive testimony
on the status of implementing PTC on the freight and passenger rail network by
the Dec. 31 deadline. Here is a link to the committee's announcement:
https://www.dtn.com/ag/assets/2018-02-15_-_rail_ssm.pdf
Reports filed with the FRA show some railroads are getting close to being
mostly compliant with PTC deadline, while others show little progress. Here is
a link to the 2017 third-quarter report of PTC implementation and status for
each railroad:
https://www.fra.dot.gov/app/ptc/
UNION PACIFIC ON TRACK TO INSTALLING PTC BY DECEMBER 2018
Union Pacific (UP) continues to make strides implementing positive train
control (PTC). The company noted in a press release on Feb. 7 that it
"anticipates it will make all required deadlines for installing PTC on its
network." However, as allowed by federal law, Union Pacific also noted "it will
continue to test and refine the immature technologies comprising the system in
2019-20."
Union Pacific's PTC footprint is the largest of all North American
railroads, encompassing more than 17,000 route miles, roughly 55% more miles
than the next largest railroad. Union Pacific said in the press release that it
is in regular contact with the FRA officials regarding its PTC progress.
Installing and implementing PTC across the U.S. rail network (passenger and
freight) is costly and complex, noted the UP. "One of the most complex parts of
implementing PTC is ensuring system interoperability among all U.S. rail lines
and locomotives. Given the various readiness levels of North American freight
and passenger railroads, it will be important that all railroads continue
working together to ensure smooth and safe transitions as PTC is implemented."
Here is a link to the UP press release and the progress it has made towards
implementing PTC: https://www.up.com/media/releases/180207-ptc-progress.htm
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
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DDG Prices Steady to Weaker
OMAHA (DTN) -- The average distillers dried grain (DDG) spot price from the
39 locations DTN collected bids from was $147 for the week ended Feb. 8, 1 cent
weaker on average than a week ago.
Based on the average of bids collected by DTN, the value of DDG relative to
corn for the week ended Feb. 8 was at 112.53%, and the value of DDG relative to
soybean meal was at 43.02%. The cost per unit of protein for DDG was $5.44,
compared to the cost per unit of protein for soybean meal at $7.19. DDG prices
are still a good buy compared to soybean meal after meal futures' recent rally.
Domestic prices were mixed as the tight supplies we have witnessed since the
start of the year have loosened some, according to merchandisers. Winter storms
have slowed some movement, but overall, prices remain steady for the most part.
However, as weather warms, that may change as demand could slow.
The U.S. Grains Council (USGC) noted in its weekly price update that FOB
NOLA DDGS are slightly lower this week at $203/mt, following CIF NOLA prices
which dropped to $191/mt. Merchandisers are reporting that, since CIF NOLA
values dropped last week, prices have softened for product destined for Asia.
However, the lower prices have increased buying activity and exporters are
reporting large volumes sold/exported.
The U.S. Census Bureau said Tuesday that U.S. exports of distillers grains
totaled 968,700 metric tons in December, up 15% from a year ago. Mexico was the
top export destination again in December, accounting for 21% of the total and
followed by South Korea, Vietnam, and Thailand. For all of 2017, exports of
U.S. distillers grains were down 2% from a year ago, their second annual
decline. DTN Market Analyst Todd Hultman noted, "It was interesting that China
came in eleventh in December with their largest shipment of distillers grains
since May."
CURRENT CURRENT CHANGE
COMPANY STATE 2/8/2018 2/1/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $170 $170 $0
Modified $85 $85 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $150 $160 -$10
Indiana Dry $150 $150 $0
Iowa Dry $145 $140 $5
Michigan Dry $160 $160 $0
Minnesota Dry $135 $140 -$5
North Dakota Dry $148 $150 -$2
New York Dry $165 $170 -$5
South Dakota Dry $145 $145 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $155 $155 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $160 $158 $2
Iowa Dry $138 $138 $0
Michigan Dry $165 $156 $9
Minnesota Dry $138 $138 $0
Missouri Dry $160 $158 $2
Ohio Dry $160 $156 $4
South Dakota Dry $140 $143 -$3
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $150 $0
Wet $50 $60 -$10
Illinois Dry $155 $155 $0
Nebraska Dry $150 $150 $0
Wet $50 $60 -$10
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $145 $150 -$5
Indiana Dry $145 $145 $0
Iowa Dry $140 $145 -$5
Michigan Dry $140 $140 $0
Minnesota Dry $135 $140 -$5
Nebraska Dry $150 $155 -$5
New York Dry $165 $165 $0
North Dakota Dry $150 $155 -$5
Ohio Dry $150 $150 $0
South Dakota Dry $140 $140 $0
Wisconsin Dry $140 $140 $0
Valero Energy Corp, San Antonio Texas (210-345-3362)
Indiana Dry $145 $145 $0
Iowa Dry $135 $135 $0
Minnesota Dry $135 $135 $0
Nebraska Dry $150 $150 $0
Ohio Dry $145 $145 $0
South Dakota Dry $128 $128 $0
California $197 $208 -$11
Western Milling, Goshen, California (559-302-1074)
California Dry $210 $212 -$2
*Prices listed per ton.
Weekly Average $147 $148 -$1
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 2/8/2018 $3.6575 $130.63
Soybean Meal 2/8/2018 $341.70
DDG Weekly Average Spot Price $147.00
DDG Value Relative to: 2/8 2/1
Corn 112.53% 115.32%
Soybean Meal 43.02% 44.61%
Cost Per Unit of Protein:
DDG $5.44 $5.52
Soybean Meal $7.19 $7.03
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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S.O.S: Locks and Dams on U.S. Rivers Falling Apart
According to a recent press release from the Soy Transportation Coalition
(STC), they noted there is "widespread agreement that it is not a matter of if
there will be a failure at one or more of our key lock and dam sites, it is a
matter of when."
"A failure of significant duration -- particularly during and subsequent to
harvest -- would severely impact the competitiveness of the soybean and grain
industries and diminish the profitability of the individual farmer. This
increasingly likely scenario must be avoided. As a result, an enhanced focus on
operations and maintenance to increase the reliability of resiliency of the
nation's locks and dams should be adopted."
"Maintenance and rehabilitation of locks and dams to significantly reduce
the potential for unexpected, widespread and prolonged failure," was
recommended by the STC. "Priority should be devoted to ensuring the reliability
of locks and dams along the nation's inland waterways. Available funding for
new construction of locks and dams should be directed first to locks and dams
20 to 25 on the Mississippi River," said the STC.
There are currently 28 locks and dams on the Upper Mississippi River system.
This series of locks and dams is operated by the U.S. Army Corps of Engineers
and maintains a 9-foot channel on the Mississippi from St. Paul, Minnesota, to
St. Louis, Missouri. As the aging locks and dams continue to deteriorate,
especially when damaged by floods, the Corps has to make costly repairs, and in
some cases, can only make a temporary fix.
The U.S. Army Corps of Engineers (USACE) has said in the past that it is
"unable to adequately fund maintenance activities to ensure the navigation
system operates at an acceptable level of performance."
The most notable disruption last fall was the multiple closures between
September and October at locks and dams 52 and 53 on the Ohio River. These
disruptions occurred at the worst time for farmers who were hauling their fall
harvest to the river for shipment to the Gulf. Even though the river finally
reopened there on Oct. 19, the backlog of tows remained an issue well into
November, slowing traffic anxious to get the Gulf for export. Problems
continued into January 2018, stalling barges at times from getting up and down
river.
In May of 2017, USACE, Rock Island District reported that there were
structural concerns on the downstream guidewall at locks and dams 52 and 53 on
the Ohio River and Dam 15 in Rock Island, Illinois. Aaron Dunlop, Operations
Project Manager for the Rock Island District's Mississippi River Project, said
in a press release that four monoliths (a large single upright block of stone)
making up a portion of the guidewall, had to be demolished as the failing
concrete was creating risk to the navigation system.
"The lower 120 feet of the guidewall is structurally failing, which could
result in it falling into the navigation channel," Dunlop said. "If it were to
fall into the channel, this would block navigation for nearly a month as crews
would need to respond to remove the broken concrete blocking access to the lock
chamber."
The section of guidewall that was demolished was original to the project.
Locks and Dam 15 was the first lock completed on the Upper Mississippi River as
part of the 9-foot navigation system. Construction at Lock and Dam 15 finished
in 1934, and the intended design life of the lock was about 50 years, according
to the USACE.
According to Mike Cox, chief of the Rock Island District's Operations
Division, locks such as those at Lock and Dam 15 have outlived their design
life due in most part to adaptive maintenance and periodic major
rehabilitation. "The concrete issue on the lock's lower guidewall is indicative
of infrastructure that is well past its prime," said Cox.
Guidewalls are integral to each of the Mississippi River Locks and Dams 2
through 10, says the USACE. Guidewalls are long extensions of the lock walls,
in either the upstream or downstream direction, that are parallel to the lock
wall. These walls serve primarily to guide the long tows into the lock and to
provide mooring facilities for tows too long to be accommodated in a single
lockage.
"Almost all of the locks and dams on the Upper Mississippi River System,
including the Illinois Waterway, are experiencing varying levels of problems
due do the age of the infrastructure," Cox said. The teams do a great job of
ensuring that critical maintenance is performed, which they have to this point,
preventing a catastrophic failure of the system." The locks and dams are
critical to the nation's economy as they provide the most efficient method to
transport goods and commodities."
President Trump noted in his State of the Union address that he will approve
funding of $1.5 trillion for the rebuilding of bridges, highways, locks and
dams, airports and other projects.
Yet, as Mike Steenhoek, executive director of the STC told DTN, "We are
still anxious to see greater specificity -- particularly regarding funding --
from the White House and Congress on an infrastructure strategy. Funding
remains the main obstacle to seeing an infrastructure package transition from
an intention to an outcome. As the weeks progress, we anticipate a more
specific set of recommendations from the White House and Congress. We look
forward to being engaged in this process."
A Jan. 3, 2018, Washington Post article quoted President Trump:
"Infrastructure is by far the easiest," the president said Dec. 22, during the
bill signing for the tax overhaul. "People want it -- Republicans and
Democrats. We're going to have tremendous Democrat support on infrastructure as
you know. I could've started with infrastructure -- I actually wanted to save
the easy one for the one down the road. So we'll be having that done pretty
quickly."
Well then, if it is such an easy fix, the government best hurry up and get
something done. "Most of our system represents a single point of failure,
because there is only one lock chamber at most sites. So, if one lock
experiences a failure, the whole navigation system would likely shut down,
which would come with a high cost," said Cox.
In other words, the time bomb continues to tick on our aging locks and dams.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
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DDG Prices Continue to Rise
OMAHA (DTN) -- The DTN average distillers dried grain (DDG) spot price from
the 33 locations DTN collected bids from (missing one company this week) was
$149 for the week ended Feb. 1, 6 cents higher on average than two weeks ago.
Based on the average of bids collected by DTN, the value of DDG relative to
corn for the week ended Feb. 1 was at 115.32%, and the value of DDG relative to
soybean meal was at 44.61%. The cost per unit of protein for DDG was $5.52,
compared to the cost per unit of protein for soybean meal at $7.03. DDG prices
continue to be well below soymeal prices, fueling demand from feeders.
A merchandiser told DTN that with ethanol production slightly lower, DDG
supplies may get tighter at plants, keeping prices firm. The U.S. Energy
Information Administration (EIA) noted a 3.4% inventory drop to 23.0 million
barrels during the week ended Jan. 26, the first draw after four straight
weekly stock builds. Plant production rate fell 2.1% to 1.04 million barrels
per day (bpd) while down 2.0% year-over-year. While some merchandisers
mentioned a slight decline in inclusion rates, they still remain strong as DDG
remains competitively priced among the products feeders can choose from for
protein intake.
The U.S. Grains Council (USGC) noted in its weekly price update that barge
CIF NOLA and FOB NOLA DDGS values were lower this week as river logistics
improve. American Commercial Barge Line (ACBL) reported in their daily river
update that Mel Price Lock (UM 201) main chamber will remain closed until March
8, but the auxiliary chamber will be available. "Beginning to see more activity
to and from the Illinois River," noted ACBL. "The volume is starting to level
out and delay at Mel Price is expected to be more manageable moving forward.
Friday morning there were six boats in queue; total delay is around 6 to 9
hours."
USGC also noted that DDGS prices were lower for rail-delivered product to
the PNW. However, on the international front, prices for 40-foot containers to
Southeast Asia increased $7/metric tons on average as demand remains robust,
especially in Indonesia, Malaysia, and Japan. Prices for product destined for
Japan increased $20/MT this week while product for Indonesia and Malaysia rose
$11/MT.
CURRENT CURRENT CHANGE
COMPANY STATE 2/01/2018 1/25/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $170 $160 $10
Modified $85 $80 $5
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $160 $150 $10
Indiana Dry $150 $150 $0
Iowa Dry $140 $135 $5
Michigan Dry $160 $155 $5
Minnesota Dry $140 $140 $0
North Dakota Dry $150 $150 $0
New York Dry $170 $170 $0
South Dakota Dry $145 $140 $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $155 $150 $5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $158 $150 $8
Iowa Dry $138 $130 $8
Michigan Dry $156 $148 $8
Minnesota Dry $138 $130 $8
Missouri Dry $158 $150 $8
Ohio Dry $156 $148 $8
South Dakota Dry $143 $135 $8
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $150 $0
Wet $60 $60 $0
Illinois Dry $155 $155 $0
Nebraska Dry $150 $150 $0
Wet $60 $60 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $150 $150 $0
Indiana Dry $145 $140 $5
Iowa Dry $145 $135 $10
Michigan Dry $140 $140 $0
Minnesota Dry $140 $130 $10
Nebraska Dry $155 $150 $5
New York Dry $165 $155 $10
North Dakota Dry $155 $145 $10
Ohio Dry $150 $145 $5
South Dakota Dry $140 $135 $5
Wisconsin Dry $140 $140 $0
Valero Energy Corp, San Antonio Texas
Indiana Dry $0 $0 $0
Iowa Dry $0 $0 $0
Minnesota Dry $0 $0 $0
Nebraska Dry $0 $0 $0
Ohio Dry $0 $0 $0
South Dakota Dry $0 $0 $0
California $0 $0 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $212 $212 $0
*Prices listed per ton.
Weekly Average $149 $143 $6
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 2/1/2018 $3.6175 $129.20
Soybean Meal 2/1/2018 $334.00
DDG Weekly Average Spot Price $149.00
DDG Value Relative to: 2/1 1/18
Corn 115.32% 113.91%
Soybean Meal 44.61% 43.54%
Cost Per Unit of Protein:
DDG $5.52 $5.30
Soybean Meal $7.03 $6.91
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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Electronic Logging Device Fight Not Over; More Exemptions Sought
Earlier this month, the Federal Motor Carrier Safety Administration (FMCSA)
announced that the Owner Operator Independent Drivers Association Inc. (OOIDA)
has requested an exemption from the electronic logging device (ELD)
requirements for motor carriers considered to be a small transportation
trucking business. The OODIA has long contended that smaller, safer carriers
should be completely exempt from what the organization contends is a "costly,
unproven" regulation.
According to Federal Register documents, OOIDA requested the exemption to
allow small trucking businesses that do not have a carrier safety rating of
"unsatisfactory" and can document a proven history of safety performance with
"no attributable at-fault crashes" to complete paper records of duty status
(RODS) instead of using an ELD device.
OOIDA believes that the exemption would not have any adverse impacts on
operational safety as motor carriers and drivers would remain subject to the
hours-of-service (HOS) regulations as well as the requirements to maintain
paper RODS.
The request by OOIDA was on top of a Nov. 20, 2017, announcement by the
FMCSA placing a 90-day exemption for truckers hauling agriculture loads and
livestock to comply with the ELD mandate that went in to effect Dec. 18, 2017.
Click here to read the FMCSA waiver: https://goo.gl/CCg34o
Mike Steenhoek, executive director of the Soy Transportation Coalition, told
DTN after that announcement that, "Many agricultural haulers are concerned due
to the cost of purchasing the equipment. Many who transport agricultural
products are small trucking firms or owner-operators who are less able to
absorb such an expense in such a tight-margin industry."
"Many are arguing that those small businesses who have a track record of
safety, who maintain a paper record of their operations should not have to
incur such a cost," Steenhoek said. "There is a concern that this mandate could
drive certain small trucking firms out of business, which will reduce the
capacity and amount of competition within agricultural shipping."
Prior to the Nov. 20 announcement, Texas Congressman Brian Babin introduced
HR 3282, "The Electronic Logging Device Extension Act of 2017." The bill sought
to amend the current ELD implementation date by two years until December 2019,
allowing more time to further evaluate the readiness of the mandate. According
to OOIDA, a separate amendment that would have cut off funding to implement,
administer or enforce the ELD mandate until Sept. 30, 2018, was defeated in the
U.S. House of Representatives. However, HR 3282 is still active legislation and
continues to gather support and now has a total of 55 Congressional cosponsors.
Click here to read about HR 3282: https://goo.gl/SdLTXb
According to a recent Transport Topics article, some trucking companies have
said they are dealing with defective devices and software integration issues,
"while some drivers and safety enforcement personnel are still learning how to
handle new paperless systems. Plus, a contingent of truck operators appear to
be holding out until the end of a soft enforcement period to decide whether to
quit the business or to comply with the ELD rule."
The "soft enforcement" means that while the mandate went into effect on Dec.
18, 2017, it will not be strictly enforced until April 1, 2018.
To say that this new rule continues to be contentious would be an
understatement.
Here is a link to the FMCSA FAQ's about the ELD mandate:
https://www.fmcsa.dot.gov/hours-service/elds/faqs
If you have any questions, be sure to call or contact the FMSCA.
FMCSA has requested public comment on OOIDA's Jan. 2 application for
exemption with a deadline of Feb. 1. To date, there have been 1,482 comments
registered -- some in favor, others opposed. The link to view and/or add
comments can be accessed here:
https://www.regulations.gov/document?D=FMCSA-2017-0356-0002
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
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Icing Continues to Besiege U.S. River System
Severe icing has wreaked havoc on the U.S River system for weeks now and
there is hope that forecasts for a warm-up the next few days may help alleviate
some of that. Still, even if there is a slight meltdown, that ice needs to work
its way down river and through locks, which could cause ice jams along their
path.
Since my story on January 8 about the extreme cold weather causing icing
throughout the U.S. river system, conditions have worsened; particularly on the
Upper Ohio River.
Over the weekend of Jan. 12, ice and high water caused a 27-barge breakaway
at the Jack's Run fleeting area at MM 4 on the Ohio River near Pittsburgh,
while another 34 barges were carried away from a fleeting area at MM 94 near
Moundsville, West Virginia, according to the U.S Army Corps of Engineers
(USACE). As of Jan. 19, 25 of the 27 barges at MM 4 have been accounted for and
all 34 barges at MM 94 have been accounted for.
At the USACE Pittsburg District, John Dilla, Chief at Locks and Dams Branch,
provided an update Friday morning Jan. 19, via their Facebook page, on the
unified effort to recover breakaway barges lodged at Emsworth Lock and Dam on
the Ohio River near Pittsburgh. Dilla noted that the USACE, U.S Coast Guard
(USCG) and navigation industry partners are working together and making
progress on restoring navigation under challenging conditions. In the video
update, he pointed out how they were digging ice out of the lock and nearby
area on the river in order to restore navigation to the Region, a high priority
for this group.
The entire video can be seen via this link: https://goo.gl/vbjJZR
Late Friday evening, Jan. 19, the USCG in a press release noted that
"Industry partners successfully conducted a barge test run at MM 95.7, and a
queue is now forming with transit granted on a case-by-case basis." However,
salvage operations are still pending as there are two unaccounted-for barges
reported to be located above the dam.
The press release noted that the USACE is continuing ice-breaking and
removal operations at Emsworth Lock and Dam. "The main chamber is now open and
ice is beginning to flow through. However, there is still heavy ice stretching
nearly 1 mile above the lock, which continues to impact operations. There are
no reports of significant damage to Emsworth Lock and Dam and no environmental
concerns from pollution.
USCG reported two safety zones, full waterway closures, which have been
established from MM 95 to MM 105 and MM 2 to MM 20 on the Ohio River due to
risk of channel obstructions.
American Commercial Barge Line (ACBL) in their daily river condition update
Jan. 19 noted that on the ice-ravaged Illinois River, there is limited movement
with significant tow size reduction. The maximum tow size is nine barges below
Hennepin and four barges above. A major trouble spot has been Marseilles Lock,
from miles 240 to 247 due to significant ice buildup in this area, making it
difficult to transit. ACBL noted that based on the current forecast, they do
not anticipate returning to normal tow size for another one to two weeks.
According to the USDA weekly Grain Transportation Report, weekly grain
tonnages along the inland waterway system have been significantly reduced since
late December due to icing. For the first two weeks of January, grain barge
tonnages were 496,000 tons; 63% lower than the same period last year. Ice
accumulation on the Illinois River has reduced the number of up-bound empty
barges to 10 for the week of Jan. 13. During the same period last year, 180
up-bound empty barges were shipped on the Illinois River. A number of barge
lines have continued to suspend operations on the Illinois River and portions
of the Ohio River until conditions improve. Low water and ice are slowing
traffic on the Mississippi River in the St. Louis, Missouri, area, especially
where heavy ice buildup around locks are not allowing lock gates to fully open.
Mike Steenhoek, Executive Director of the Soy Transportation Coalition, told
DTN via email that "Ice accumulation can present a number of adverse impacts on
navigation. The entire channel can be closed entirely. The channel width can be
reduced, and therefore, the size of barge flotillas will need to be reduced.
There are numerous reports of normal 15-barge flotillas being reduced to
six-to-nine-barge flotillas. A 15-barge flotilla can transport up to 855,000
bushels of soybeans (57,000 bushels per barge). A six-barge flotilla will only
be able to transport 342,000 bushels of soybeans. A nine-barge flotilla will
transport 513,000 bushels of soybeans. Ice accumulation can also impede the
ability of lock gates from opening and closing."
Whenever barge transportation faces slowdowns, due to weather or constant
repairs, the results are always passed onto farmers in the form of higher barge
freight costs, and at times, their inability to haul grain to a river terminal.
"If there is a supply chain disruption and logjam along the river, soybean and
grain shippers that utilize the inland waterway system are less able to move
product via their back door," said Steenhoek.
"If a soybean and grain shipper cannot move product via their back door,
they are less able to accept product via their front door. As a result, soybean
and grain shippers will drop the price offered (i.e. basis will be widened/more
negative) to farmers. Therefore, farmer profitability will be impacted not
because they did anything wrong, but simply because the supply chain is not
operating as expected."
"Given that 80% of soybean exports depart from the U.S. between September
and February, this is a critical period for our supply chain to be operating as
normal. Any impediment, like the ice accumulations impacting areas of the
inland waterway system that normally are operating at this time of the year,
have a negative impact," concluded Steenhoek.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
******************************************************************************
DDG Prices Remain Strong
OMAHA (DTN) -- The DTN average distillers dried grain (DDG) spot price from
the 39 locations DTN collects bids from was $143 for the week ended Jan. 18, 1
cent higher than the prior week.
Based on the average of bids collected by DTN, the value of DDG relative to
corn for the week ended Jan. 18 was at 113.91%, and the value of DDG relative
to soybean meal was at 43.54%. The cost per unit of protein for DDG was $5.30,
compared to the cost per unit of protein for soybean meal at $6.91, 39 cents
higher versus last week (see chart below) as soymeal prices saw strong gains
all week. The higher soybean meal price is causing more DDG demand for
livestock feed rations, further adding support to prices.
A merchandiser out west told DTN that slow loadings of corn from the Midwest
and strong values in the Midwest for modified DDG is keeping supplies out to
the West Coast rather tight. Overall, supplies have been tight due to cold
weather and plant slowdowns. That may change going forward as the recent EIA
report showing ethanol plant output topped 1.0 million barrels per day (bpd)
again after briefly dipping below the mark the week prior and for the first
time since early October. For the week ending Jan. 12, EIA reported plant
output up 65,000 bpd to 1.061 million bpd last week.
The U.S. Grains Council (USGC) noted in its weekly price update that trade
volume has been reported as "light" with sellers defending asking prices and
buyers somewhat unwilling to chase prices higher. Prices for 40-foot containers
to Southeast Asia are higher again this week, gaining $5 per metric ton (mt) on
average. February shipments to Myanmar increased the most of any Asian
destination this week, gaining $7/mt, while shipments to Indonesia and China
increased $6/mt each, according to USGC.
CIF (cost, insurance and freight) NOLA (News Orleans, Louisiana) prices were
stronger from one week ago, but January prices this week have backed off a
little. This could partially be due to tight supplies as well as the U.S. river
system still under siege from ice.
The Upper Ohio River was closed earlier in the week due to barge breakaways
over the weekend in that area caused by heavy ice movement. There is still
limited movement due to ice above the Hannibal Lock, but in the Lower Ohio
River, Lock 52 and 53 are now open for traffic. The Illinois River is also
plagued with floating ice, which is causing "significant tow size reduction"
according to American Commercial Barge Line (ACBL). Also, conditions have
deteriorated above Hennepin, (MM207) due to low temperatures and ice gorging.
There is hope a warming trend over the weekend will bring some relief. ACBL
also noted that there is a reduction in tow size in the Lower Mississippi River
at MM483-487 due to low water and "lack of a defined channel."
CURRENT CURRENT CHANGE
COMPANY STATE 1/18/2018 1/11/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $160 $160 $0
Modified $80 $80 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $150 $144 $6
Indiana Dry $150 $145 $5
Iowa Dry $135 $133 $2
Michigan Dry $155 $150 $5
Minnesota Dry $140 $135 $5
North Dakota Dry $150 $145 $5
New York Dry $170 $160 $10
South Dakota Dry $140 $140 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $150 $150 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $150 $150 $0
Iowa Dry $130 $130 $0
Michigan Dry $148 $148 $0
Minnesota Dry $130 $130 $0
Missouri Dry $150 $150 $0
Ohio Dry $148 $148 $0
South Dakota Dry $135 $135 $0
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $150 $145 $5
Wet $60 $60 $0
Illinois Dry $155 $150 $5
Nebraska Dry $150 $145 $5
Wet $60 $60 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $150 $150 $0
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Michigan Dry $140 $140 $0
Minnesota Dry $130 $130 $0
Nebraska Dry $150 $150 $0
New York Dry $155 $155 $0
North Dakota Dry $145 $145 $0
Ohio Dry $145 $145 $0
South Dakota Dry $135 $135 $0
Wisconsin Dry $140 $140 $0
Valero Energy Corp, San Antonio, TX (402-932- 5299)
Indiana Dry $140 $140 $0
Iowa Dry $135 $135 $0
Minnesota Dry $130 $130 $0
Nebraska Dry $145 $145 $0
Ohio Dry $140 $140 $0
South Dakota Dry $125 $125 $0
California $202 $202 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $212 $212 $0
*Prices listed per ton.
Weekly Average $143 $142 $1
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
**
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 1/18/2018 $3.5150 $125.54
Soybean Meal 1/18/2018 $328.40
DDG Weekly Average Spot Price $143.00
DDG Value Relative to: 1/18 1/12
Corn 113.91% 114.00%
Soybean Meal 43.54% 45.87%
Cost Per Unit of Protein:
DDG $5.30 $5.26
Soybean Meal $6.91 $6.52
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
******************************************************************************
DDG Prices Climb Higher
OMAHA (DTN) -- The DTN average distillers dried grain (DDG) spot price from
the 39 locations DTN collects bids from was $142 for the week ended Jan. 11, 4
cents higher than two weeks ago.
Based on the average of bids collected by DTN, the value of DDG relative to
corn for the week ended Jan. 11 was at 114.00%, and the value of DDG relative
to soybean meal was at 45.87%. The cost per unit of protein for DDG was $5.26,
compared to the cost per unit of protein for soybean meal at $6.52.
Merchandisers noted that the market is higher in part due to tight supplies
as ethanol plants have been running at a slower pace than normal. The EIA
reported ethanol plant production in the United States fell 36,000 barrels per
day (bpd) to a 996,000 bpd three-month low for the week ending Jan. 5. Higher
drying costs and tight margins have been contributing factors to the slowdown.
Merchandisers told me that containers destined for Vietnam in the Midwest
are still waiting to be fumigated but can't be because of the cold weather. As
discussed last week, Vietnam requires temperatures (for this time of year) to
be 50 to 59 degrees Fahrenheit for a minimum exposure period of five days. Also
extreme ice conditions continue to plague the Illinois River where traffic is
all but shut down.
American Commercial Barge Line noted Thursday that limited movement remains
on the Illinois River with significant tow-size reduction. "The max tow size is
nine barges below Hennepin and four barges above. One major trouble spot is the
Marseilles Canal, around mile 245. There is significant ice buildup in this
area, making it difficult to transit. The Marseilles Lock queue is building,
currently 12 boats. Based on the current forecast, we don't anticipate
returning to normal tow size for another 30 days." On top of these issues on
the Illinois River, tow size southbound from St. Louis to Cairo on the
Mississippi River has been reduced due to ice and low water conditions.
The U.S. Grains Council (USGC) said in its weekly price update that barge
CIF NOLA prices are steady this week while FOB NOLA prices are $2/metric ton
(MT) lower on light trading volume. "FOB NOLA prices are 124% of FOB NOLA corn
values, which is at the upper end of the ratio's two-year trading range. Prices
for 40-foot containers destined for Southeast Asia are $1/MT higher on average,
but with light trading volume."
CURRENT CURRENT CHANGE
1/11/
COMPANY STATE 2018 1/4/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $160 $165 -$5
Modified $80 $82 -$2
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $144 $142 $2
Indiana Dry $145 $140 $5
Iowa Dry $133 $130 $3
Michigan Dry $150 $145 $5
Minnesota Dry $135 $130 $5
North Dakota Dry $145 $145 $0
New York Dry $160 $155 $5
South Dakota Dry $140 $137 $3
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $150 $150 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $150 $145 $5
Iowa Dry $130 $128 $2
Michigan Dry $148 $140 $8
Minnesota Dry $130 $128 $2
Missouri Dry $150 $142 $8
Ohio Dry $148 $145 $3
South Dakota Dry $135 $135 $0
` `
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $145 $140 $5
Wet $60 $65 -$5
Illinois Dry $150 $148 $2
Nebraska Dry $145 $140 $5
Wet $60 $65 -$5
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $150 $140 $10
Indiana Dry $140 $130 $10
Iowa Dry $135 $130 $5
Michigan Dry $140 $135 $5
Minnesota Dry $130 $125 $5
Nebraska Dry $150 $145 $5
New York Dry $155 $140 $15
North Dakota Dry $145 $145 $0
Ohio Dry $145 $135 $10
South Dakota Dry $135 $135 $0
Wisconsin Dry $140 $130 $10
Valero Energy Corp., San Antonio, TX (402-932-5901)
Indiana Dry $140 $135 $5
Iowa Dry $135 $130 $5
Minnesota Dry $130 $125 $5
Nebraska Dry $145 $145 $0
Ohio Dry $140 $135 $5
South Dakota Dry $125 $125 $0
California $202 $200 $2
Western Milling, Goshen, California (559-302-1074)
California Dry $212 $206 $6
*Prices listed per ton.
Weekly Average $142 $138 $4
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.
VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 1/11/2018 $3.4875 $124.55
Soybean Meal 1/11/2018 $309.60
DDG Weekly Average Spot Price $142.00
DDG Value Relative to: 1/12 1/4
Corn 114.00% 110.08%
Soybean Meal 45.87% 43.70%
Cost Per Unit of Protein:
DDG $5.26 $5.11
Soybean Meal $6.52 $6.65
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
******************************************************************************
Extreme Cold Causes US Rivers to Ice Over
The only place where frozen bodies of water are a good thing this time of
year is in the Upper Midwest where many of us Northerners enjoy the winter
ritual of ice fishing. Icing on the U.S. river system, however, is not a
welcome sight, as it causes delays and dangerous conditions for tows pushing
barges trying to move commodities downriver to the Gulf of Mexico for export.
The severe cold spell that gripped most of the country the past week caused
the Illinois River to ice over. On Jan. 5, Tom Russell, of Russell Marine
Group, told me that barge traffic on the Illinois River is all but stopped due
to ice. "A couple of barge lines are still trying to move without much success.
As traffic stops, the ice gorges get worse without movement to break and push
the ice along."
American Commercial Barge Line (ACBL) noted in its daily river update that,
"Operations have ceased due to heavy ice throughout the river. Boats are moving
to find the closest safe harbor until conditions improve. Based on the 10-day
forecast, conditions will continue to deteriorate."
ACBL also noted that on the Upper Ohio River, there was minimal movement due
to ice above Montgomery Lock. On top of that, the U.S. Army Corps of Engineers
(USACE) closed Lock 52 on the lower Ohio to raise the wickets, noting they
believe this process will take around four days. The river is expected to open
Sunday or Monday. According to the USACE, during low water, "the gates must be
raised individually to impound water, creating a navigable depth from Locks and
Dam 52 to Smithland Locks and Dam, Kentucky Lake and Lake Barkley."
Russell also said, "Locks on the Upper Mississippi just above St. Louis are
icing, causing locking delays. Tow size restrictions have been implemented for
tows locking through. The Upper Mississippi River from St. Louis to Cairo is
seeing ice flows along the corridor. Also, that stretch of river is
experiencing low water levels. Boat traffic is moving very slowly due to ice
and low water.
"A tow has gone aground at mile 47 (north of Thebes, Illinois) whereby only
limited traffic can pass until refloated," added Russell. "Water levels from
St. Louis to Cairo are expected to continue to drop over the next couple weeks.
Further restrictions may have to be implemented."
Because of the icing and low water conditions along most of the U.S. river
system, barge freight rose mid-week, and soybean and corn basis was higher at
the Gulf, as loaded barges have been unable to get there on time. According to
the USDA weekly transportation report, "With the cold temperatures and icy
conditions, grain barge rates, as of Jan. 2, rose 15% for export grain on the
Illinois River and 9% on the Mississippi River at St. Louis compared to the
prior week."
Even if the ice conditions improve, which may take some time, the low water
levels will exist until the river system can refresh. On Jan. 5, the
Mississippi River at St. Louis was 1.73 feet below zero gauge and was not
expected to rise above minus 1.3 feet before Jan. 18 and maybe later. At
Memphis, the Mississippi River is currently at 4.86 feet on Jan. 5, but
expectations from the National Weather Service (NWS) are that without any
moisture in the next week, levels will fall to 1.5 feet below zero gauge by
Jan. 18.
While barge traffic is normally lighter now than it is during the summer and
fall months, there are still commodities that need to get to the Gulf on time
for existing contracts to be filled. Low-water conditions can cause barge
drafts to be lightened, meaning less product can be loaded and possibly reduce
the number of barges a tow can move. The danger of low water is grounding, as
noted above, and when that happens, the grounded barges need to be safely
removed before traffic can move forward.
On top of the icing currently affecting river traffic, low-water conditions
only exacerbate the issues for elevators trying to load out and barge lines
trying to get empty barges upriver and full barges down to the Gulf.
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn
******************************************************************************